A great example of the enforceability of settlement agreements that contain confidentiality agreements is the Gulliver Schools1 case out of Florida. There, Patrick Snay, the former headmaster of a private school, brought a claim for age discrimination. The case settled, and Snay was to be paid $80,000. However, the settlement agreement included a confidentiality agreement. Before he received his settlement proceeds, Snay breached the confidentiality clause of the settlement agreement by informing his daughter that he had settled with the school. And how do we know that?

Well, Snay’s daughter was kind enough to post a snarky comment about the school on Facebook (which included a reference to Gulliver Schools paying for her trip to Europe and the parting shot: “Suck it.”) When the school learned of the Facebook posting, it refused to pay. Although the trial court had ruled in favor of Snay (who had brought a motion to enforce), the Florida Court of Appeals agreed with the school and reversed. The Florida appellate court found that the bottom line was that the confidentiality clause was clear and unambiguous, it was breached, and disgorgement was the articulated remedy. So goodbye $80,000.

So I guess Gulliver Schools did suck it, sucking back the nice sum of $80,000.

That's an interesting aspect of non-disclosure agreements - no family.

12 comments:

The Swiss pharma companies enforce such contractual agreements. I know that Roche did many years ago and the person concerned ended up in jail. Today the obligations are still valid, even for retired workers.

Research-related nondisclosure agreement was what Pfizer used as a tool against Mylan who tried to depose me for a Sutent patent lawsuit (almost a decade after I stopped working for Pfizer). They did not threaten me in any way but they wrote a very chilly letter to Mylan, informing them that if I broke my confidentiality it would not be a good thing for me but I might be fool enough to do that; however if it could be proven that Mylan tried to take advantage of my naivite and knowingly incited me to break my confidentiality, then there is a clear precedent that would mean whole a lot of troubles for Mylan trying to use information gleaned from me. As a result Mylan broke off communication with me and this created a bizarre screwup where I got suddenly subpoenaed on a very short notice, to give a deposition just before Christmas holidays, 200 miles from the place I lived, because Mylan folks were too worried to even contact me to get a current home address and propose the deposition date...

First rule should have been not to tell the kids, although I would have assumed his daughter would be old enough to know better. My kids are getting old enough to understand lots and not old enough to have any idea what to talk about and what not to, and so there isn't much reason to anything actionable to them.

On the other hand, everyone who wants to now knows (more or less) how Gulliver Schools behave. Expensive PR, though.

If followed as the should be such agreements can be hindrances to job seekers as I have in the past attended a number of candidate interview seminars where saw info presented that suspected was was confidential and unlikely to be authorized by previous (or even current in cases) employer. If spoke with person individually I would ask about that where most indicated they felt only showed work they did (often highly doubtful unless they did both compound synthesis and ran the biological assays) thinking it must be OK and ultimately admitted sought or received no permission (on the other hand one person actually did pull out a submitted for publication letter that allowed disclosure). It may have been harsh but I always wrote-off these candidates as unsuitable due to demonstrated inability to handle sensitive materials so would be careful not to trap yourself even if past company might not pursue actions. Advice I got and used after a layoff was to collect details of what projects I had worked on including possible slides that might wish to present and then sent in letter by certified mail to the Department VP as request to use this info for my job search. I gave them a definite time limit to respond (think was 2 weeks as actually had an interview scheduled) where said if receive no response that would take the silence as consent freely use info.

As far as non-disparagement clauses I was told as long as you can support your negative statements with facts or witnesses you are likely to be safe however probable risk there will come off as whiner or people who might not fit in. Best advice there was do a Mom says "if can not say anything nice about someone then don't say anything at all. Most of these type clauses I have seen more relate to stock price implications and typically for Sr people who might actually be listened to vs lab jockeys.

this is a legit question to ask on a job interview, and the applicant should have a satisfactory answer (we already disclosed these structures in a provisional patent that was granted, etc.). I would have two comments on this 1) some large organizations (Sanofi-Aventis!!!) had patent-office censors in charge of approving publications, for them any structure and any communication was a potential problematic disclosure and priort art, and that is why they a priori denied any and every publication request. The idea that you would submit your job interview talk to them when leaving the company, and they would give you a go-ahead, is laughable.When I was interviewing for a job and my best work was still on the shelf (Pfizer was quite slow patenting it), I would draw a general cyclic structure with a blank space in the middle and say that this modification resulted in single digit nanomolar compounds active in cell but I cannot give a full account, I would show no hard data (numbers, compound identifiers etc.) and I would describe its atypical binding site without showing a solved co-crystal X-ray structure. While I felt this was somewhat unsatisfactory it was enough to complete the story of the project, I presumed that medicinal chemists and management in the audience uderstood why it is hard to give up-to-date detailed account of an active project that is still in the medchem stage. So, while this was legally unauthorized, it would not divulge the most sensitive info - the SAR tables, X-ray binding mode and animal data. (This actually worked and I got the job and a good offer with a promotion and a raise right on the first interview)

Oy, the hypocrisy in this. I understand calling somebody out on work that you think might be sensitive. I also understand being very cautious about hiring that person. Those things make sense to me. What doesn't is that you then turn around and say "I'd ask for permission to show stuff, but tell them if I didn't get a reply after 2 weeks I'd take that as consent." Aside from that argument never holding up in court, how do you know the other people who you wrote off didn't apply the same logic? And why do you get to apply this loose standard to yourself but you only accept written disclosure documents from candidates who you screen?

BW to clarify part of the admissions were confirming with them the info was indeed part of active and/or unpublished/unpatented work which I considered sufficient justification. Most people it seemed to lack of maturity and appropriate knowledge with a more academic than industrial mindset regarding sharing of info and IP even though they had at least a few years of industrial experience. One time I did know someone at a guys previous company whom I did contact and found out was indeed not kosher however never heard if anything was done since person had been let go.

Skeptic I feel no hypocrisy in the time limit as was based on direct legal advise and was a formal letter delivered with traceability (so assume would have held up in court). This was also done as a follow-up to request made in exit interview weeks before and further I knew was asking about 'grey area" items older or incomplete dropped projects that were not public but still subject to my initial CDA (reconfirmed at exit) that required written permission. Because I was not able to take files with me or get them afterwards I had to reconstruct a bunch of slides from memory

So if they don't show you any of their work you won't hire them, and if they do you assume they're untrustworthy. It sounds like the winners were the people who moved on and never dealt with you again.

Skeptic is right. And while you "feel no hypocrisy", well, that says even more about you. I'm amazed you've gone through the hiring process yourself and maintain this attitude.

We should simply outlaw these idiotic non-disclosure agreements, except in the case of IP. They give too much power to employers and make future job searches too difficult. Anything approximating a free market requires that ex-employees be able to tell the truth about their ex-employers.

From the East Coast, I consulted for a crazy Russian physicist on a start-up idea for "Company A" that he had, complete with NDA. But then switched over to consulting for his ideas on "Company B". He then hired me as a consultant to work in the lab for "Company B" on the West Coast.

There was a NDA for "Company A", but not "Company B". "Company A" only existed on paper. The job was a poor fit, so I'm back on the market. Even though there was no NDA for "Company B", while interviewing, I still don't disclose it's IP, because it would obviously make a poor impression on future potential employers. And anyway, I believe that my own ideas are more reasonable than those of the IP.